WILMINGTON, Del. (Legal Newsline) - Walmart has again asked a federal judge in Delaware to dismiss a securities class action claiming it misled investors about opioid litigation, saying an amended complaint is even worse than the original.
The new version of the lawsuit filed in October still fails to identify any false or misleading statements Walmart made about opioid cases against it, the company says, instead relying on what U.S. District Judge Colm Connolly described as a “smorgasbord” of allegations to try to survive summary judgment.
Plaintiff lawyers accuse Walmart executives of failing to disclose a threatened federal investigation into its opioid dispensing practices by Justice Department attorneys in Texas in 2017. Walmart disclosed the probe after it met with DOJ officials in 2018. But plaintiff lawyers say those disclosures were inadequate and its shares fell after ProPublica published an article in 2020 detailing how the company was threatened with criminal liability until DOJ officials in Washington intervened.
Walmart moved to dismiss the lawsuit last year but Judge Connolly gave plaintiff lawyers another chance to amend their complaint and add details to their claims. That attempt failed, Walmart said, in a Nov. 16 motion to dismiss.
The old complaint “did not identify an alleged false statement until page 96 of 147,” Walmart said, but the amended complaint “is worse.”
“It does not identify an alleged misstatement until page 106 of a now-160-page complaint,” the company said.
Plaintiff lawyers tried to bolster their allegations by citing adverse rulings Walmart has since suffered in the MDL, including a jury verdict and that led U.S. District Judge Dan Aaron Polster to order $651 million in “remediation” to address opioid-related problems in two Ohio counties.
Walmart doesn’t admit wrongdoing, however, and is fighting the judgment before the Sixth Circuit Court of Appeals even as it has agreed to pay billions of dollars to settle opioid litigation. At a hearing earlier this year, Judge Connolly said it was a “joke” plaintiff lawyers would seek to include later judicial findings in their lawsuit over a stock drop dating from 2020.
The ProPublica article itself was misleading, Walmart argued in its motion to dismiss, since it suggested Walmart had improperly used its influence in Washington to shut down the Texas probe. “What really happened” was Walmart complained to the superiors of the Texas prosecutors that they had improperly threatened it with criminal prosecution to try and leverage a monetary settlement, the motion says.
Walmart shares fell the day of the ProPublica article but recovered within five days and were trading 30% higher by the end of the year, and had nearly doubled from where they were at the beginning of the class period, the company said.
Walmart still faces a Justice Department lawsuit in Delaware. The government rewrote its complaint after the U.S. Supreme Court ruled in Ruan v. U.S. that prosecutors must prove doctors “knowingly” wrote invalid opioid prescriptions to show they violated the Controlled Substances Act. The same standard applies to pharmacists, Walmart argued, meaning the government can’t rely on statistical analysis to “prove” they filled too many prescriptions.